US: Alternative-Energy Quest Is Blocked by a 1953 Law
PLEASANT VALLEY, N.Y., June 16 - With its white Victorian houses and manicured yards, this upstate bedroom community does not appear to be a rabble-rousing town.
But two months ago, Pleasant Valley, tucked in the Taconic mountains just east of Poughkeepsie, became outlaw territory in the eyes of the state comptroller's office when local officials decided they cared more about the environmental source of the town's electricity than its price.
The town decided to use wind energy for its 328 street lamps, two public baseball parks and all the rest of its municipal needs, even though it was slightly more expensive than conventional sources. In doing so, however, it ran up against a 51-year-old state law that requires cities to use the least expensive source for a commodity.
"It didn't seem like a big deal at the time," said John McNair, the town supervisor, seated under the dim flicker of fluorescent lights in his cramped town hall office. "If taxpayers here are willing to pay an extra $1.88 per year to have clean electricity, I don't see why there should be a problem."
Mr. McNair, who calls himself a Reagan Republican, said the town stood by him. The only time that members of the public come to local board meetings, he said, is when Boy Scout merit badges are handed out. "But for this issue," he said, "they showed up to support."
At the root of the issue is a 1953 state law, often called the "bidding act," intended to protect taxpayers from careless spending and graft. The law presents a problem for Pleasant Valley, which is the first town in New York State to use only wind power, as well as 20 other towns that are partly dependent on wind for their power needs. The law also could present problems for Gov. George E. Pataki's plan to get the state to use renewable energy for 25 percent of its needs by 2013.
"We don't write the laws," said David Neustadt, a spokesman for State Comptroller Alan G. Hevesi. "We just help explain them when asked." Mr. Neustadt said that the comptroller's office had no methods of enforcement and provided only advisory decisions, but that the law was clear: local governments must award contracts to the lowest bidder who provides the same commodity. These towns are in violation, he said, at least until the laws change.
In the meantime, an indignant defiance is spreading in certain soft-spoken towns upstate.
"We're pretty law-abiding here," said Richard Shea, a carpenter and member of the town board for Philipstown in Dutchess County, which voted earlier this month to get half its electricity from wind. "But on this issue, I don't care if it's illegal, because it's the right thing to do."
Philip J. Bishop, a resident of the town of New Paltz, which gets a third of its electricity from wind, expressed similar frustration. "It's ridiculous," he said. "All of the sudden, we've become rebel territory." The town only recently finished dealing with all the attention over the gay marriages performed there, he said. "We're not used to such continual controversy."
The dispute started two months ago simply because someone asked permission.
The Dutchess County town of Beacon held a meeting to consider switching to wind power, and Joe H. Braun, the town administrator, decided to call the state comptroller's office to ask about the legality of the plans. In a conversation first reported by The Poughkeepsie Journal, Mr. Braun was told that buying wind power was forbidden because of the price.
"I asked how so many other towns had already been getting wind energy since 2001," Mr. Braun said in a telephone interview. "I was told that the others simply hadn't asked first."
Bruce J. Donegan, a member of the Pleasant Valley board, said he would be surprised if his town was penalized for being ahead of the curve. "I'm a Republican, and fiscal responsibility is important to me," he said, "but so, too, is energy independence and clean air."
Mary M. Swartz agreed. A Dutchess County legislator who helped persuade her town of Fishkill to get 60 percent of its electricity from wind, Ms. Swartz pointed out that there were consequences for choosing cheaper and dirtier forms of energy.
"You can pay extra for clean energy up front," said Ms. Swartz, who is a Republican, "or you can choose dirty energy and pay extra for the cleanup after the fact." Standing in the local Hess gas station and convenience store that she owns - it draws some of its electricity from wind - Ms. Swartz added that she was also acutely aware of concerns about the country's dependence of foreign sources of energy.
Wind energy has attracted attention in New York ever since Mr. Pataki signed a measure in 2001 aimed at encouraging the reduction of greenhouse gas emissions and requiring that one-fourth of the state's electricity come from renewable sources by 2013. Two weeks ago, the Public Service Commission took the added step of issuing a 144-page preliminary decision explaining how the state should meet this goal, and defining what forms of energy qualify as renewable. Although the state gets about 19 percent of its power from renewable sources, mostly from hydroelectric dams, power industry experts predict that much of the remainder of the 25 percent will come from wind power.
Windmills in New York produce around 50 megawatts of energy, enough to power 500,000 hundred-watt bulbs, but the state's potential is estimated at nearly 10,000 megawatts. Ron Kamen, the New York director for Community Energy, a company that markets wind power, said his company had about 5,000 residential and 21 municipal customers in New York.
Aside from consumers, producers of wind energy - mostly farmers near Syracuse who have installed windmills on their land for extra income - are also worried.
"Without enough customers, we could be in trouble," said Donna Griffin, who in 2001 put some windmills on her 428-acre cattle farm in the town of Fenner, about 22 miles east of Syracuse. There are 20 windmills on 11 farms in Fenner, the largest concentration in the state. Explaining that her contract limits her ability to say exactly how much she makes from the windmills on her property, Ms. Griffin said, "Let's just say it's a huge financial help."
Some people disagree with the comptroller's interpretation of the law.
The lawyer for the town of Pleasant Valley, Scott L. Volkman, said local officials certainly had no intention of evading competitive bidding rules. "But our view is that this is a distinct product," he said, explaining that electricity produced by wind was legally categorized as something different than electricity produced by more standard means, like coal or nuclear energy. Wind and certain other forms of renewable energy in the state are exempt from competitive bidding rules, he said, because there are too few competitors to bid.
Mr. Volkman also pointed out that competitive bidding has always been a loose requirement. If the competitive bidding laws were strictly followed, municipalities would have had to resubmit their electricity contracts for new bidding when deregulation allowed consumers to purchase energy cheaper from other regions, he said. "Of course," he added, "no one did that because it would have been chaos."
Mr. Neustadt, from the comptroller's office, disagreed. "I think the law is pretty clear on this matter," he said. "Our office is in favor of renewables, but the regulations are what they are."
Either way, Sandra R. Galef, a Democratic assemblywoman from Westchester, is not taking any chances. She recently proposed a law that would allow municipal officials to pay 15 percent above market rates to get their electricity from renewable sources.
"The only way the price of solar, water and wind energy will ever become competitive is if the state encourages enough customers to sign up," she said. "But until then the price for clean energy is going to remain high."
This is not a new predicament, Ms. Galef pointed out. In the late 1980's, she said, many town governments wanted to buy recycled paper for their offices. They were blocked, she said, because it was more expensive. A 1988 law permitting an exemption to the bidding rules for recycled products prepared the way for the price to come down, she said.
"There were people on the frontier of the issue then," she said. "There are people on the frontier now."
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